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Just days ago, news broke that the Social Security Administration was moving to collect on old debts by seizing tax refunds–including in some cases those of relatives. But on Monday, it was announced that Social Security would not collect on taxpayer debts owed the government that are older than 10 years. The Washington Post’s Marc Fisher, the reporter who broke the original collection story, joins Kojo to explore what it means for all taxpayers.
- Marc Fisher Senior Editor, The Washington Post
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later in the broadcast, a look at the minor league teams that feed the majors in baseball. John Feinstein joins us. But first, the Washington Post reported last week on a little noticed move on the part of federal agencies. Hundreds of thousands of taxpayers expecting money back, instead have gotten letters saying their refunds were being seized to pay off an old debt, in some cases decades old and incurred by a parent or spouse.
MR. KOJO NNAMDIThe Social Security Administration has been especially aggressive. It appears that the spotlight has caused them to reverse course. The Social Security Administration announced yesterday that it will stop collecting debts that are more than 10 years old. Joining me now is the man who broke the story. Marc Fisher is a senior editor for the Washington Post. He joins us from studios at the Post. Marc Fisher, thank you for joining us.
MR. MARC FISHERGood to be with you, Kojo.
NNAMDIMarc, you were part of the Post team covering the NSA story that won a Pulitzer Prize for public service yesterday. The Post was a co-recipient along with the Guardian's U.S. office. So congratulations on that.
FISHERThank you. It was a great day for the Washington Post and for journalism.
NNAMDIIt certainly was. Of course, it will leave for history a lot of questions about ultimately how Ed Snowden will be remembered. But we'll pass on that for now, although I'm sure you have a lot to say about that. That's a discussion for another time. For this time, for those who did not see the original story about this debt collection, tell us about it.
FISHERWell, this all started when a number of people across the country, in fact thousands of people across the country, didn't get the tax refunds -- their state and federal tax refunds that they were expecting to get. And a woman in Takoma Park, Md., was the first one I became aware of. Back when she was four years old, her father died. This was going back to 1960. And as a result, her mother received survivors benefits from Social Security for the care and feeding of her and her four siblings. Well, flash forward to when she was 18 and she no longer got those benefits, and then flash forward another 37 years and her tax refund is taken away.
FISHERWell, what's the connection between the two? The fact is that the government, because they've now lifted the statute of limitations on these very old debts, the government says that the Social Security folks overpaid the Grice family in benefits way back when, and now they're collecting that debt. But since Mary Grice's parents are no longer alive, they're coming after her and taking her money. Why they chose her rather than her four siblings is a mystery. And why they would go after her without notifying her about this debt is an even greater mystery.
NNAMDIThe aggressive collection of these old debts began three years ago. Can you explain how it came about?
FISHERWell, back in 2008, Congress passed the Farm Bill, the Farm Bill they do every year. And it always becomes this big sort of a compendium of lots of different unrelated bits of legislation. And there was this single line that was thrown into this 900-plus page bill that lifted that statute of limitations, that said that the government could now go after debts that were more than 10 years old. Well, when you go back after debts that are that old, it involves going after debts that were incurred by a lot of people who have since died.
FISHERAnd so when Treasury Department got around to writing the regulations that allowed them to after these debts and spell out how they would go about doing it, by that point it was 2011. And they said that these agencies could go after the children of those who'd incurred those debts. And they started doing that a couple of years ago. They've really picked up the pace this year. And I've now heard from hundreds and hundreds of people across the country whose tax refunds were taken, and that was the first they heard of this.
NNAMDI800-433-8850 is the number to call. Has your tax refund ever been taken by the government to collect a debt? You can also send us email to email@example.com or send us a tweet @kojoshow. Marc Fisher is the senior editor for the Washington Post who broke the story. What I found, I guess, surprising, maybe even jaw-dropping, Marc, was that the reason why the relatives of the person who incurred the debt, certainly in the case of Social Security, can be found responsible for it, is that that person may have benefitted from that overpayment, even though that person was a child.
NNAMDISo, in my own case, when my wife died in 1982, I received money from Social Security for the care of my sons. If I were to pass, my sons, under that law, rule, could have been responsible for that debt, because theoretically, they benefitted from the overpayment, correct?
FISHERIt does seem like a real stretch. That is exactly the argument that Social Security makes in defending their decision to go after these children. Now, you can go elsewhere in the same federal government -- the Federal Trade Commission has a statement on its website that says it is not legal in this country to hold children accountable for their parents' debts. Why is the government therefore able to do this? Well, they say that those children received indirect benefits by virtue of these survivors benefits. It was meant for their care after the death of a parent.
FISHERWell, those kids now argue -- they're adult kids by this point -- but they argue, first of all, we often didn't know we were getting the benefits. Second, we don't know that the money was spent on our behalf. And, third, we had no say in the matter. So why should we be held responsible? And then there's this really bizarre way in which the government goes about collecting -- choosing who to collect the debt from. Mary Grice, the woman in Takoma Park, who was the central figure in my first story about this, she's the middle of five children.
FISHERWell, the government says that they go after surviving relatives in birth order. But none of Mary's siblings has had their money confiscated. What appears to be the case, as I talk to more and more people across the country, is the government goes after whoever is making a good, steady income. And so they'll pass over older siblings if they're either unemployed or just not making a lot of money.
NNAMDIIt's my understanding that Mary Grice has filed suit over this. Is that correct?
FISHERYes. So she filed suit last week in federal court in Greenbelt. And she's going to pursue this because even though the Social Security Administration yesterday, under pressure, announced that they would stop these debt collections of debts that are more than 10 years old. That doesn't do anything for the thousands and thousands of people across the country who already had their tax refunds taken from them. And for those people to get their money back, there's been no policy change as yet. And so the lawsuit goes on.
FISHERThe lawsuit is also a constitutionally grounded one that argues that these hundreds of thousands of people across the country -- Social Security Administration says there are 400,000 people in this category -- that they never had any due process. They never got notice. In Mary Grice's case, Social Security says they sent a notice to a post office box in North Carolina, a state she hasn't lived in for more than 30 years, and that was the extent of the legal notice they provided, when they full well knew her current, correct address because they send her Social Security statements there every year.
NNAMDI800-433-8850. Do you think it's fair for the government to go after the relatives of people who owed money -- the relatives? 800-433-8850. You can send email to firstname.lastname@example.org. We're talking with Marc Fisher, senior editor for the Washington Post, who broke this story. Marc, you mentioned that the Social Security Administration decided to stop collecting these old debts after some pressure. Where was that pressure coming from? And why was the pressure of common sense not applied a long time before this?
FISHERWell, this appears to be one of these cases where the bureaucracy took hold of the change in the law and created regulations that ended up having this effect that really violates people sense of fairness. And so the pressure came after we published our first story. The story was republished across the country in many, many newspapers. It became -- it sort of went viral online. And so thousands of people who'd had this happen to them didn't know of any avenue of recourse -- came out of the woodwork, started writing to their Congressmen, started calling news organizations around the country.
FISHERAnd there was this groundswell over the weekend, Friday through Monday, and a number of Congressmen came out and demanded that Social Security back off and stop trying to be so aggressive about collecting these debts and stop doing it in this manner that seemed to not provide people with due process. And so finally Monday evening, last night, Social Security announced that they would stop these collections of these very old debts.
FISHERBut they said that they are not reversing the policy, at least not yet. They're going to be conducting some sort of a study to figure out the road forward. And they made no announcement of any kind about the people whose money has already been confiscated by the government.
NNAMDII wondered about that, if this can be retroactive. What recourse do people who have already had their tax refunds taken have at this point? You mentioned that people all over the country, after your article was published and reprinted, people all over the country -- it seems as though this is a kind of revolt of the little people, if you will, because we live in a political environment where people on both the left and the right feel that the big banks contributed to the wrecking of the economy and did not pay, in their view, a very severe penalty for it.
NNAMDIAnd now, along comes this story, where all of these little people are being found all over the country. Is that -- do you think that characterizes the reaction to your article?
FISHERAbsolutely. You know, in the news business, you can never be certain which stories are going to really hit a chord. This one had all the markings of going viral in this way though because it violates that sense of fairness that people have, that since that the little people, you know, the government, everyone agrees, is in financial trouble. Everyone agrees that the government ought to collect on its debts and be aggressive about that and efficient about that.
FISHERBut to then go back and change the rules on people is what really offends a lot of people. So because there was this statute of limitations and people knew that debts of more than 10 years were not collectable, and then for the government to change the rules and suddenly go back and collect on those debts -- the very same government that advises people that you can destroy your financial records after three or four years...
FISHER...now is saying to people, well, if you want your money back, you have to prove your innocence. You can't prove your innocence, because no one keeps documents of that nature going back 40 years. And it's not even your own documents, it's your parents' documents. Who has their parents' documents from 40 years ago? It's just unrealistic.
NNAMDIWe got a tweet from Phil who says, "What about the lack of proof of debt?" What was the proof of debt that was offered to, say, Mary Grice?
FISHERPretty much nothing. They told her that there was an overpayment by Social Security on her father's Social Security account number. Because the way they keep records is on the account number of the deceased, they say they have no way of knowing whether the benefit money went to one -- to Mary or one of her siblings, or to her mother or to her stepmother, which is her father's ex-wife who she never even met. So she's potentially in the position of being -- now being forced to pay off a debt incurred by a person she never met, her stepmother.
FISHERSo these kinds of situations are coming up all over the country where people who were children, small children, when their parents received benefits -- maybe they never even knew about the benefits. And the government is unable to provide them with any documentation that shows why they should be held responsible for that debt. There's just this general statement that because you, as a child, received some indirect benefit, or the benefit was intended for your care, you somehow are now to be held accountable.
NNAMDIHere's Will in National Harbor, Md. Will, you're on the air. Go ahead, please.
WILLI was wondering whether this particular case was a standalone issue or whether it fit more broadly into a broader class of actions by the IRS, where they seem to increasingly target individuals which have a hard time mounting defenses, and are less excited about pursuing large, multi-nationals, which have, you know, large, ever-present legal teams, which handle their tax issues. And those are very hard for the IRS to pursue because of the legal battles that they know will ensue when they go after large corporations.
NNAMDIWell, I don't think this originated with the IRS. But, Marc Fisher, in investigating this, you had a hard time identifying who was responsible for initiating this policy.
FISHERRight. There's been a festival of finger pointing on this, trying to find out who came up with this. Who initiated the idea of lifting the statute of limitations? When I talked to Social Security, they said, well, it had to have come from Treasury. I went to them, they said, oh, it had to have been from the Congress. Congress couldn't find any record of anyone there initiating this. They said it had to come from the bureaucracy.
FISHERBut the point about this kind of being done on the back of the little people is an important one because It's what gets people's goat about this story. And it is indeed true. The IRS has nothing to do with this. The Treasury collects the money on behalf of federal agencies. And there has been a number of agencies that have been aggressive about this.
FISHERThey are under a lot of pressure to bring in money. And, in fact, they anticipated that there would be some discomfort with this policy because Treasury actually went out and studied whether it was costing them more to collect the money than they were actually bringing in in money. And so by their accounting they are making a profit for the American people. But that's little solace to those who are having their tax refunds intercepted, as the government puts it.
NNAMDIGiven the outrage, Marc Fisher, I don't think we've heard the last of this story.
FISHERNo, I don't think so. There are a lot of people now who are gathering together to -- to ban together to try to fight this and get their money back. They don't really have recourse to lawyers because the amounts of money in these cases tend to be rather small. And so it's not worth the time of most lawyers to get involved. And fighting Social Security is a very time consuming process. So we don't know yet whether there will be a process for people to get their refunds back. That's the next chapter.
NNAMDIHey, it's a political season. Look for Capitol Hill to get involved. Marc Fisher is a senior editor for the Washington Post. Marc, thank you so much for joining us.
NNAMDIWe're going to take a short break. When we come back, John Feinstein, we look at minor league teams that feed the majors in baseball. I'm Kojo Nnamdi.
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